MN Real Estate cheat sheet

Minn. Stat. ch. 82 governs Minnesota broker and salesperson licensing; the Commissioner of Commerce administers licensing and discipline.

A salesperson must be affiliated with a licensed broker, and only that broker may pay the salesperson compensation earned in the transaction.

Minnesota requires 30 hours of prelicense education for a salesperson license and 90 hours for a broker license, plus the state exam.

Renewal requires 30 hours of continuing education during each two-year license period.

Typical grounds for discipline include misrepresentation, commingling trust funds, undisclosed dual agency, and failure to supervise.

Advertising for a listed property must identify the brokerage by its licensed name; team names must be registered and tied to the brokerage.

Unlicensed assistants may do clerical and ministerial work but may not negotiate, discuss contract terms, or perform acts requiring a license.

Licensees must make transaction and trust records available for inspection by the Commissioner on request.

A written agency disclosure must be provided to the consumer at the first substantive contact in the transaction.

Minnesota representation options: seller's agent, buyer's agent, dual agent (with written consent of both parties), or facilitator.

A facilitator assists the parties without representing either one; it owes honesty and disclosure of material facts but no fiduciary duties.

Fiduciary duties owed to a client: loyalty, obedience, disclosure, confidentiality, reasonable care and diligence, and accounting.

The compensation arrangement does not create or determine agency; the parties' written agreement controls representation.

Dual agency requires informed written consent and impartial conduct; the broker may not advocate for either side.

Confidential information gained in an agency generally remains protected after the agency ends.

Known material facts about the property must be disclosed to all parties regardless of which party the licensee represents.

Statute of Frauds: a contract for the sale of land must be in writing and signed by the party to be charged.

Minnesota's statute of limitations for written contracts is six years, which governs enforcement of a purchase agreement.

A counteroffer terminates the original offer; a contract forms only when acceptance is communicated to the offeror.

Each contingency (inspection, financing, appraisal, home sale) must state a deadline and the remedy if it fails.

Addenda and amendments must be signed and incorporated by reference to be enforceable parts of the agreement.

Earnest money is credited to the purchase price at closing; a seller may retain it as liquidated damages only where the contract so provides.

Time is generally of the essence, so stated deadlines are enforced unless the parties agree to extend them in writing.

Electronic signatures are enforceable under Minnesota's Uniform Electronic Transactions Act.

The Minnesota Seller's Property Disclosure Statement is required for residential property of one to four units and is delivered before the buyer signs.

Common exemptions include new construction never occupied, foreclosure and sheriff's certificate transfers, gifts, co-tenant transfers, and court-ordered transfers.

A Well Disclosure Certificate (Minn. Stat. ch. 103I) identifying each well's location and status is required before signing.

The Minnesota disclosure form includes a radon warning statement, and known methamphetamine production on the property must be disclosed.

Federal lead-based paint requirements apply to pre-1978 housing: disclosure of known hazards, the EPA pamphlet, and a 10-day inspection opportunity.

If the seller delivers the disclosure after signing, Minnesota law gives the buyer a limited right to cancel the purchase agreement.

The seller's disclosure does not replace the buyer's duty to inspect, and an 'as is' sale does not shield fraud or misrepresentation.

Material facts discovered after delivery should be disclosed promptly through an amended statement.

Fee simple absolute is the broadest estate; a life estate lasts only for the life of the measuring person.

An easement appurtenant benefits a neighboring parcel and runs with the land; an easement in gross benefits a person or entity.

Minnesota's adverse possession period is 15 years of continuous, hostile, open, and exclusive possession (Minn. Stat. § 541.02).

Minnesota is a race-notice recording state: a later purchaser prevails only by recording first and without notice of the prior interest.

Torrens (registered) land transfers by certificate of title with memorials, not by recording a deed in the abstract system.

Minnesota does not recognize tenancy by the entirety; spouses typically hold as joint tenants or tenants in common.

Joint tenancy carries a right of survivorship; tenancy in common does not and passes by will or intestacy.

Condominiums and common interest communities are governed by Minn. Stat. ch. 515B and the association's declaration and bylaws.

Minnesota is a lien theory state: the mortgage creates a lien and the borrower retains title until a foreclosure sale.

RESPA/TRID: the Loan Estimate is delivered within three business days of application; the Closing Disclosure at least three business days before consummation.

Minnesota state deed tax is 0.33% of consideration; mortgage registry tax is 0.23% of the principal debt.

Contract for deed cancellation under Minn. Stat. § 559.21 requires written notice and a statutory cure period, generally 60 days for most residential contracts.

FHA loans carry mortgage insurance premiums; VA loans charge a funding fee instead of monthly mortgage insurance; USDA loans charge guarantee fees.

Borrower-requested PMI cancellation is available at 80% loan-to-value; automatic termination occurs at 78% of original value.

PITI includes principal, interest, property taxes, and hazard insurance; qualifying uses a front-end housing ratio and a back-end total debt ratio.

Financing and appraisal contingencies protect the buyer only if exercised within the stated deadlines in the purchase agreement.

In the sales comparison approach, comparables are adjusted toward the subject: a feature the subject has and the comparable lacks adds value to the comparable.

Cost approach value = replacement cost new − depreciation + land value; it is most reliable for new or unique construction.

Income approach: value = net operating income ÷ capitalization rate.

Gross rent multiplier = sale price ÷ gross monthly rent; a lower multiplier indicates less rent support for the price.

A comparative market analysis prepared by an agent is a pricing opinion, not an appraisal, and cannot substitute for an appraisal on a federally related loan.

Key valuation principles: substitution, contribution, conformity, regression and progression, and highest and best use.

Comparables requiring large gross or net adjustments should be given less weight in the final reconciliation.

Absorption rate = units sold in a period ÷ units available; a low rate signals a buyer's market and downward price pressure.

Federal protected classes: race, color, religion, sex, national origin, familial status, and disability.

The Minnesota Human Rights Act adds creed, marital status, status with regard to public assistance, and sexual orientation; local ordinances may add more.

Prohibited practices include refusing to sell or rent, offering different terms, discriminatory advertising, steering, blockbusting, and redlining.

Reasonable accommodation changes rules, policies, or services; reasonable modification changes the physical unit and is generally at the tenant's expense.

Familial status protects households with children under 18, pregnant women, and persons securing custody; occupancy limits must be reasonable.

Housing for older persons is exempt when all residents are 62 or older, or 55 or older with at least 80% occupancy.

A HUD fair housing complaint must be filed within one year; a private civil action must be filed within two years.

The small owner-occupied four-unit exemption does not permit discriminatory advertising and does not exempt real estate licensees.

Trust funds include earnest money, security deposits, rents collected for others, and advance fees held on behalf of clients.

Commingling is prohibited: trust funds must be held in a separate trust account, apart from the broker's operating funds.

Required trust records include the transaction file, checkbook register, individual transaction ledgers, and a monthly reconciliation.

Brokerage and trust records must be retained for six years and produced for examination by the Commissioner.

The qualifying broker is responsible for supervising licensed salespersons and unlicensed staff and for their advertising and trust fund conduct.

Trust disbursements require authorization in the transaction documents, and commissions may not be drawn before deposited funds clear.

Advertising must show the licensed brokerage name; a team name may be used only when properly registered with the brokerage and the Commissioner.

Property management and leasing funds belong to the owner or tenant and are administered under the same trust account rules.

Closing activities: settlement statement, deed delivery and recording, title insurance issuance, payoff of liens, and disbursement of funds.

Recurring items such as taxes, rent, and association dues are prorated between buyer and seller, typically through the day of closing.

Minnesota property taxes are payable in the year after assessment, so prorations use the most recent certified tax figure.

FIRPTA requires the buyer to withhold 15% of the gross sales price when the seller is a foreign person and remit it to the IRS.

Gross proceeds are generally reported to the IRS on Form 1099-S; certain principal-residence sales are exempt when the seller certifies the exclusion.

An owner's title policy protects the buyer against covered defects existing before closing; a lender's policy protects only the mortgagee's interest.

A Section 1031 exchange requires identification of replacement property within 45 days and closing within 180 days, with a qualified intermediary holding proceeds.

Post-closing duties include delivering the recorded deed and final title policy, confirming disbursement, and retaining the complete transaction file.